The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain level for your filing status. These levels are as follows:

Filing Status

AGI Level That Reduces Exemption Amount

Married filing separately

$ 125,100

Single

166,800

Head of household

208,500

Married filing jointly

250,200

Qualifying widow(er)

250,200

You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status. However, you can lose no more than 1/3 of the dollar amount of your exemptions. In other words, each exemption cannot be reduced to less than $2,433.

If your AGI exceeds the level for your filing status, use the Deduction for Exemptions Worksheet in the instructions for Form 1040 or Form 1040A to figure the amount of your deduction for exemptions. However, if you are claiming a $500 exemption for housing a Midwestern displaced individual, use Form 8914 instead.